THE HACKETT GROUP, INC Brickell Bay Drive, 30 th Floor Miami, Florida 33131

Transcription

1 THE HACKETT GROUP, INC Brickell Bay Drive, 30 th Floor Miami, Florida March 23, 2017 Dear Shareholder: You are cordially invited to attend the 2017 Annual Meeting of Shareholders of The Hackett Group, Inc. (the Company ) to be held on May 3, 2017, at 2:00 p.m. (local time) at the InterContinental Buckhead 3315 Peachtree Rd, Atlanta, Georgia, in the Hope meeting room. At this meeting you will be asked to: vote for the election of the director identified in the accompanying proxy statement; approve an amendment to the Company s 1998 Stock Option and Incentive Plan (the Plan ) to (i) increase the sublimit under the Plan for restricted stock and restricted stock unit issuances by 1,200,000 shares, and (ii) increase the total number of shares authorized for issuance under the Plan by 1,200,000 shares; approve an amendment to the Company s Employee Stock Purchase Plan (the Purchase Plan ) to (i) increase the number of shares authorized for issuance under the Purchase Plan by 250,000 shares, and (ii) extend the term of the Purchase Plan by five years until July 1, 2023; hold an advisory vote on executive compensation; hold an advisory vote on the frequency of the advisory vote on executive compensation; and ratify the appointment of RSM US LLP as the Company s independent registered public accounting firm for the fiscal year ending December 29, These matters are discussed in detail in the accompanying proxy statement. It is important that your shares be represented at the meeting whether or not you plan to attend. Included with these soliciting materials is a proxy card for voting, an envelope with postage prepaid in which to return your proxy, instructions for voting by telephone or on the Internet and our 2016 Annual Report to Shareholders. On or about March 24, 2017, we are mailing to our shareholders a notice containing instructions on how to access our proxy statement and 2016 Annual Report and vote online. The notice also contains instructions on how you can receive a paper copy of your annual meeting materials, including the notice of annual meeting, proxy statement and proxy card. We look forward to receiving your vote and seeing you at the meeting. Sincerely, Ted A. Fernandez Chairman and Chief Executive Officer

2 THE HACKETT GROUP, INC Brickell Bay Drive, 30 th Floor Miami, Florida NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 3, 2017 The 2017 Annual Meeting of Shareholders of The Hackett Group, Inc. (the Company ) will be held on May 3, 2017, at 2:00 p.m. (local time) at the InterContinental Buckhead 3315 Peachtree Rd, Atlanta, Georgia, in the Hope meeting room, for the following purposes: 1. to elect to the Board of Directors the director identified in the accompanying proxy statement; 2. to approve an amendment to the Company s 1998 Stock Option and Incentive Plan (the Plan ) to (i) increase the sublimit under the Plan for restricted stock and restricted stock unit issuances by 1,200,000 shares, and (ii) increase the total number of shares authorized for issuance under the Plan by 1,200,000 shares; 3. to approve an amendment to the Company s Employee Stock Purchase Plan (the Purchase Plan ) to (i) increase the number of shares authorized for issuance under the Purchase Plan by 250,000 shares, and (ii) extend the term of the Purchase Plan by five years until July 1, 2023; 4. to hold an advisory vote on executive compensation; 5. to hold an advisory vote on the frequency of the advisory vote on executive compensation; 6. to ratify the appointment of RSM US LLP as the Company s independent registered public accounting firm for the fiscal year ending December 29, 2017; and 7. to transact such other business as may properly come before the meeting or any postponement or adjournment thereof. The Board of Directors has fixed the close of business on March 15, 2017 as the record date for determining the shareholders entitled to notice of and to vote at the annual meeting. Only holders of common stock of record at the close of business on that date will be entitled to notice of and to vote at the annual meeting or any postponement or adjournment thereof. A list of the Company s shareholders entitled to vote at the annual meeting will be open to examination by any shareholder for any purpose related to the meeting during ordinary business hours for the ten days prior to the annual meeting at the Company s offices, as well as on May 3, 2017 at the location of the annual meeting. All shareholders are cordially invited to attend the annual meeting. On or about March 24, 2017, we are mailing to our shareholders a notice containing instructions on how to access our proxy statement and 2016 Annual Report and vote online. The notice also contains instructions on how you can receive a paper copy of your annual meeting materials, including the notice of annual meeting, proxy statement and proxy card. By Order of the Board of Directors, Frank A. Zomerfeld Secretary Miami, Florida March 23, 2017 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 3, 2017: The Hackett Group, Inc. s Proxy Statement and 2016 Annual Report are available at Whether or not you plan to attend the annual meeting, we ask that you do the following. If you are receiving this document via U.S. mail, please complete, date, sign and return the enclosed proxy card in the postage prepaid envelope or vote by telephone or through the Internet as instructed on the proxy card. If you sign and return your proxy card without specifying a choice, your shares will be voted in accordance with the recommendations of the Board of Directors. If you are receiving this document via Internet delivery only, please vote by telephone or through the Internet as instructed on the notice you received via U.S. mail. You may, if you wish, revoke your proxy at any time before it is voted by submitting to the Secretary of the Company, Frank A. Zomerfeld, a written revocation or a duly executed proxy bearing a later date, or by attending the annual meeting and voting in person. If you submit your proxy by telephone or through the Internet, you may also revoke it by submitting a new proxy using the same procedures at a later date. The telephone and Internet voting facilities for shareholders of record will close at 1:00 a.m. Central Time on the day of the meeting.

3 TABLE OF CONTENTS SOLICITATION, VOTING AND REVOCABILITY OF PROXIES... 1 PROPOSAL 1: ELECTION OF DIRECTOR... 4 General... 4 Nominee... 5 Continuing Directors... 5 Other Executive Officer... 6 Corporate Governance and Other Matters... 7 Audit Committee... 8 Compensation Committee... 9 Nominating and Corporate Governance Committee... 9 Other Matters COMPENSATION COMMITTEE REPORT COMPENSATION DISCUSSION AND ANALYSIS Overview of Compensation Philosophy and Objectives The Elements of Executive Compensation at the Company Role of Consultants Shareholder Say on Pay Vote Executive Compensation Decisions for Executive Compensation Decisions for Timing of Equity Incentive Plan Awards and Discretionary Equity Awards Tax and Accounting Considerations and Compensation Deductibility Policy Compensation Recovery SUMMARY COMPENSATION TABLE GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OPTION EXERCISES AND STOCK VESTED (During fiscal year-ended December 30, 2016) Narrative Disclosure to Summary Compensation Table and Plan-Based Awards Table POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL DIRECTOR COMPENSATION OUTSTANDING DIRECTOR EQUITY AWARDS AT 2016 FISCAL YEAR-END Compensation Committee Interlocks PROPOSAL 2: TO APPROVE AN AMENDMENT TO THE COMPANY S 1998 STOCK OPTION AND INCENTIVE PLAN PROPOSAL 3: TO APPROVE AN AMENDMENT TO THE COMPANY S EMPLOYEE STOCK PURCHASE PLAN PROPOSAL 4: ADVISORY VOTE ON EXECUTIVE COMPENSATION PROPOSAL 5: ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION REPORT OF THE AUDIT COMMITTEE PROPOSAL 6: TO RATIFY THE APPOINTMENT OF RSM US LLP AS THE COMPANY S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 29, CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS Review, Approval or Ratification of Related Person Transactions BENEFICIAL OWNERSHIP OF COMMON STOCK SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE SHAREHOLDER PROPOSALS FOR THE ANNUAL MEETING IN WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION OTHER BUSINESS TO BE TRANSACTED APPENDIX A: 1998 STOCK OPTION AND INCENTIVE PLAN APPENDIX B: EMPLOYEE STOCK PURCHASE PLAN i

4 THE HACKETT GROUP, INC Brickell Bay Drive, 30 th Floor Miami, Florida PROXY STATEMENT ANNUAL MEETING OF SHAREHOLDERS MAY 3, 2017 SOLICITATION, VOTING AND REVOCABILITY OF PROXIES This proxy statement and the accompanying notice of annual meeting and proxy card are being furnished and made available, on or about March 24, 2017, to the shareholders of The Hackett Group, Inc. (the Company ), in connection with the solicitation of proxies by the Board of Directors of the Company (the Board ) to be voted at the 2017 Annual Meeting of Shareholders to be held on May 3, 2017 at 2:00 p.m. (local time) at the InterContinental Buckhead 3315 Peachtree Rd, Atlanta, Georgia in the Hope meeting room and any postponement or adjournment thereof. If the form of proxy enclosed or provided via the Internet is properly executed and returned to the Company, or voted via telephone or the Internet in time to be voted at the annual meeting, the shares represented thereby will be voted in accordance with the instructions thereon or submitted via the telephone or Internet. The Board recommends that you vote: FOR the Board s nominee for director; FOR Proposal 2 to approve an amendment to the Company s 1998 Stock Option and Incentive Plan (the Plan ) to (i) increase the sublimit under the Plan for restricted stock and restricted stock unit issuances by 1,200,000 shares, and (ii) increase the total number of shares authorized for issuance under the Plan by 1,200,000 shares; FOR Proposal 3 to approve an amendment to the Company s Employee Stock Purchase Plan (the Purchase Plan ) to (i) increase the number of shares authorized for issuance under the Purchase Plan by 250,000 shares, and (ii) extend the term of the Purchase Plan by five years until July 1, 2023; FOR Proposal 4 to approve, in an advisory vote, the Company s executive compensation; EVERY YEAR on Proposal 5 recommending the frequency of the advisory vote on executive compensation; and FOR Proposal 6 to ratify the appointment of RSM US LLP as the Company s independent registered public accounting firm for the fiscal year ending December 29, Executed but unmarked proxies submitted to the Company will be voted in accordance with the Board s recommendations. If any other matters are properly brought before the annual meeting, proxies will be voted in the discretion of the proxy holders. The Company is not aware of any such matters that are proposed to be presented at the annual meeting. On or about March 24, 2017, the Company is mailing to its shareholders a notice containing instructions on how to access this Proxy Statement and the Company s 2016 Annual Report and to vote online. The notice also contains instructions on how you can receive a paper copy of your annual meeting materials, including the notice of annual meeting, proxy statement and proxy card. 1

5 Shareholders receiving this document and accompanying proxy card and annual report via the Internet may submit their proxies by telephone or through the Internet as instructed in the notice delivered via U.S. mail. Shareholders receiving this document and accompanying proxy card via U.S. mail may submit a signed proxy card or they may submit their proxy by telephone or through the Internet as instructed on the proxy card. Telephone and Internet proxies must be used in conjunction with, and will be subject to, the information and terms contained on the proxy card. These procedures may not be available to shareholders that hold their shares through a broker, nominee, fiduciary or other custodian. If your shares are held in this manner, please check your proxy card or contact your broker, nominee, fiduciary or other custodian to determine whether you will be able to vote by telephone or through the Internet. The cost of soliciting proxies in the form enclosed herewith will be borne entirely by the Company. In addition to the solicitation of proxies by mail, proxies may be solicited by directors, officers and regular employees of the Company, without extra remuneration, by personal interviews, telephone or otherwise. The Company will request persons, firms and corporations holding shares in their name or in the names of their nominees, which are beneficially owned by others, to send proxy materials to and obtain proxies from the beneficial owners and will reimburse the holders for their reasonable expenses in doing so. The securities that may be voted at the annual meeting consist of shares of the Company s common stock. Each outstanding share of common stock entitles its owner to one vote on each matter as to which a vote is taken at the annual meeting. The close of business on March 15, 2017 has been fixed by the Board as the record date (the Record Date ) for determination of shareholders entitled to vote at the annual meeting. On the Record Date, 29,187,155, shares of common stock were issued and outstanding and entitled to vote. The presence, in person or by proxy, of at least a majority of the shares of common stock issued and outstanding and entitled to vote on the Record Date is necessary to constitute a quorum at the annual meeting. Shares can be voted only if the shareholder is present in person or represented by proxy. Whether or not you plan to attend in person, you are encouraged to sign and return the enclosed proxy card or vote by telephone or through the Internet as instructed on the proxy card or in the notice mailed to you. Assuming the presence of a quorum at the annual meeting, the following voting standards will apply to the various proposals: In the absence of a contested election, pursuant to the majority voting provisions of our bylaws, the Board s nominee for director will be elected only if the votes cast for such nominee s election exceed the votes cast against such nominee s election. For more information regarding the majority voting provisions of the Bylaws, see Proposal 1 Election of Directors on page 4 of this proxy statement. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote is required to approve the plan amendment in Proposal 2. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote is required to approve the plan amendment in Proposal 3. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote is required to approve the proposal on executive compensation in Proposal 4. Proposal 4 is an advisory vote, which means that it is not binding on the Company. However, the Compensation Committee of the Board will take into account the outcome of the vote when considering future executive compensation decisions. No voting standard is applicable to the advisory vote on the frequency of the advisory vote on executive compensation in Proposal 5. However, the Board will take into account the outcome of the vote when determining the frequency of future advisory votes on executive compensation. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote is required to ratify the appointment of the Company s independent registered public accounting firm for the fiscal year ending December 29, 2017 in Proposal 6. 2

6 Abstentions and broker non-votes will be treated as shares that are present in person or represented by proxy at the meeting and entitled to vote for purposes of determining the presence of a quorum at the annual meeting. A broker non-vote occurs when a nominee holding shares for a beneficial owner votes on one proposal, but does not vote on another proposal because the nominee does not have discretionary voting power and has not received instructions from the beneficial owner. Abstentions and broker non-votes will not have any effect on the approval of Proposals 1 and 5. Because abstentions will be counted for purposes of determining the shares present or represented at the annual meeting and entitled to vote, abstentions will have the same effect as a vote against Proposals 2, 3, 4 and 6. Broker non-votes will not have any effect on the approval of Proposals 2, 3, 4 or 6. The presence of a shareholder at the annual meeting will not automatically revoke the shareholder s proxy. Shareholders may, however, revoke a proxy at any time prior to its exercise by filing with the Secretary of the Company a written notice of revocation, by delivering to the Company a duly executed proxy bearing a later date or by attending the annual meeting and voting in person. If you submitted your proxy by telephone or through the Internet, you may also revoke it by submitting a new proxy using the same procedures at a later date. The telephone and Internet voting facilities for shareholders of record will close at 1:00 a.m. Central Time on the day of the meeting. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF THE BOARD NOMINEE, FOR THE APPROVAL OF PROPOSALS 2, 3, 4 AND 6 AND EVERY YEAR FOR PROPOSAL 5. 3

7 PROPOSAL 1 ELECTION OF DIRECTOR General The Company s articles of incorporation provide that the Board shall consist of no fewer than five directors and no more than fifteen directors. The Company s bylaws provide that the number of directors, within such limits, shall be determined by resolution of the Board. The Board currently is composed of six directors. The Board is divided into three classes. One class is elected each year for a term of three years. One director will be elected at the annual meeting. The Board has nominated John R. Harris, an existing director, for the position. If elected, Mr. Harris will each serve a three-year term expiring at the annual meeting in You can find more information about Mr. Harris below. Unless otherwise instructed on the proxy, it is the intention of the proxy holders to vote the shares represented by each properly executed proxy for the election of the nominee. The Board believes that the nominee will stand for election and will serve if elected. However, if any nominee fails to stand for election or is unable to accept election, proxies will be voted by the proxy holders for the election of such other person as the Board may recommend. In the absence of a contested election, pursuant to the majority voting provisions in our bylaws, the Board s nominee for director will be elected only if the votes cast for such nominee s election exceed the votes cast against such nominee s election. If the majority vote requirement applies and a nominee who currently is serving as a director is not re-elected, our bylaws provide that he or she must tender his or her resignation to the Board. The Nominating and Corporate Governance Committee will then consider such resignation and recommend to the Board whether to accept or reject the resignation. The Board will decide whether to accept or reject any such tendered resignation within 90 days after certification of the election results and will publicly disclose its decision and the rationale therefor. If the resignation is not accepted, the director will continue to serve until his or her successor is elected and qualified, until there is a decrease in the number of directors, or until the director s earlier resignation or removal. The majority voting provisions apply only to elections in which the number of nominees does not exceed the number of directors to be elected. In the event of an election in which the number of nominees exceeds the number of directors to be elected, nominees will be elected by a plurality vote. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF MR. HARRIS AS DIRECTOR. Information as to the Nominees and Continuing Directors The following table sets forth certain information regarding the Board s nominee for election as director and those directors who will continue to serve as such after the annual meeting. Name Age (1) Director Since (2) Position held with the Company Term Expires NOMINEE John R. Harris(3) CONTINUING DIRECTORS David N. Dungan Vice Chairman and Chief Operating Officer 2018 Richard N. Hamlin(3) Ted A. Fernandez Chairman and Chief Executive Officer 2019 Robert A. Rivero(3) Alan T.G. Wix(3) (1) The ages shown are as of March 15,

8 (2) The dates shown reflect the year in which these persons were first elected or appointed as directors. (3) Member of the Audit, Compensation and Nominating and Corporate Governance Committees. The principal occupations and other public company directorships for the past five years or more of the nominee for director and the five directors whose terms of office will continue after the annual meeting are set forth below. Specific experience, qualifications, attributes and skills that the Board believes qualify each current director, including director nominees, for his position on the Board are also summarized below. This description is not intended as an exclusive description of the types of expertise or contributions provided by each director. Nominee John R. Harris is Chairman of HIFU Prostate Cancer Services, Inc. a leading provider of non-invasive high intensity ultrasound treatment for localized prostate cancer. In addition, Mr. Harris served as a part time operating partner and investor with glendontodd Capital and was Chief Executive Officer of Chemical Information Services, a company which provides information services to chemical sourcing professionals from February 2011 to January He has in-depth experience in public company operations and management, having served as the former President and Chief Executive Officer of etelecare Global Solutions, a provider of outsourced customer care services. Mr. Harris served in these roles from February 2006 until October Mr. Harris served as Chief Executive Officer of Seven Worldwide Inc., a digital content management company, from December 2003 to January From July 2002 to December 2003, he served as Chief Executive Officer and President of Delinea Corporation, an application and business process management company serving the energy industry. From August 2001 to July 2002, Mr. Harris served as Chief Executive Officer and President of Exolink. From September 1999 to September 2001, he served as Chairman and Chief Executive Officer of Ztango, Inc. Mr. Harris has an extensive history of senior executive leadership positions and board participation in the information technology, media, telecommunications and outsourcing industries. Mr. Harris spent twentyfive years with Electronic Data Systems ( EDS ), during which he held a variety of executive leadership positions including Group Executive and President of EDS s four strategic business units serving the telecommunications and media industries. He also served as EDS s Corporate Vice President, Marketing & Strategy. Mr. Harris provides significant public company board experience through his prior service on the boards of, and as an advisor to, companies including BancTec, Applied Graphic Technologies, Genuity, CapRock Communications, Startek, Premier Global and Sizmek (formerly DG Fast Channel). He continues to provide additional operational perspective through his participation as a director of Mobivity Holdings Corp. Continuing Directors David N. Dungan is a founder of the Company, along with Mr. Fernandez. He served as a Managing Director from the Company s inception until March 2000 when he became a director and was named Chief Operating Officer ( COO ). Mr. Dungan was named Vice Chairman in February of Mr. Dungan provides the Board with broad financial and operational experience managing and leading a professional services firm focused on business consulting. Prior to founding the Company, Mr. Dungan served as the National Partner-in- Charge of the World Class Finance Practice of the Strategic Services Consulting Division of KPMG LLP ( KPMG ). from May 1994 to February Mr. Dungan joined KPMG in 1986 and, until May 1994, held various executive positions with that firm. Ted A. Fernandez founded the Company in 1997 based on a strategy he developed from his extensive history in the professional services industry, which included an eighteen-year career with KPMG from 1979 to 1994, Mr. Fernandez held several industry, executive and client service positions with KPMG. His career at KPMG culminated in the role of the National Managing Partner of KPMG s Strategic Services Consulting Division from May 1994 to January Mr. Fernandez also served as a member of KPMG s Management Committee from 1995 to He brings an in-depth knowledge of the professional services industry, especially business consulting, and organizational leadership within that industry. He also provides extensive financial and accounting experience to the Board. Mr. Fernandez provides the Board with day to day knowledge of the 5

9 Company s business and markets. He also provides broad and deep experience with strategic plan development and execution. Mr. Fernandez has served as the Chairman of the Board and Chief Executive Officer ( CEO ) since founding the Company. Richard N. Hamlin is a consultant and investor. He served as the Chief Financial Officer of CommerceQuest, Inc. from July 2002 to August He provides the Board with extensive financial and accounting experience gained over a more than thirty-year career as a Certified Public Accountant at KPMG. Mr. Hamlin served as a partner of KPMG for twenty-one years, which included service on KPMG s board of directors from 1994 to 1998, and later became a partner of KPMG Consulting. Mr. Hamlin s work experience provides additional depth of capability to the Audit Committee. Mr. Hamlin is designated an audit committee financial expert as defined by regulations of the Securities and Exchange Commission (the SEC ). Mr. Hamlin also possesses a history of participation on a public company board as a former member of the board of directors and Chairman of the Audit Committee of etelecare Global Solutions. Mr. Hamlin provides operational perspective from outside of the business consulting industry, having served as the Chairman and Trustee of the Dakota Minnesota Eastern Railroad, a wholly-owned subsidiary of Canadian Pacific Railroad, from October 2007 through November Robert A. Rivero was appointed to the board on February 19, 2016, to fill the vacancy created by Terence M. Graunke s resignation and was elected by our shareholders at our last annual meeting. Mr. Rivero held numerous operating management positions as a Senior Managing Partner of KPMG where he held positions ranging from Office Managing Partner to Regional Partner in Charge and ultimately, National Senior Partner in Charge, leading nine different business units (both domestic and overseas). Mr. Rivero is the Chief Executive Officer of RAR Management Services, LLC which provides advisory services to CEOs, assists companies in the development and implementation of strategic action plans for growth and profitability, and provides solutions to international business operating challenges. The Company benefits from Mr. Rivero s broad experience base within the professional services industry. He also brings additional in-depth knowledge of financial and accounting experience to the Board. With experience advising senior executives of large international companies and having lived and managed operations in Europe, Latin America & Southeast Asia, Mr. Rivero s knowledge of international markets is a valuable asset to the Board. Alan T.G. Wix is a Director of BDC Partnership Ltd. Mr. Wix was the Chairman of Fiva Marketing, Ltd. from April 2003 to December Mr. Wix served as the Chairman of the Board of Farsight PLC from April 1999 until June Mr. Wix served as the Chief Executive Officer of Farsight PLC from April 1999 until June Mr. Wix brings to the Board an extensive history of senior executive leadership at a major financial institution, having retired in August 1998 as Managing Director Core IT Development of Lloyds TSB, a position he held from January From April 1990 to January 1993, Mr. Wix held the position of Head of Development at Lloyds TSB. Prior to being elevated to that position, Mr. Wix held a variety of positions within the information systems division of Lloyds TSB. He has in-depth operational experience leading a significant division of an institution with global reach. He also has extensive experience as a purchaser of technology and business consulting services, and, as such, provides perspective on customer experience. Mr. Wix is a native of the United Kingdom and spent his professional career in the United Kingdom. He continues to make his home there. His knowledge of the European marketplace provides valuable international perspective to the Board. Other Executive Officer The principal occupation during the past five years or more of the Company s other executive officer is set forth below. Robert A. Ramirez, 50, is the Company s Executive Vice President, Finance and Chief Financial Officer ( CFO ), a position he has held since August Mr. Ramirez served as Corporate Controller of the Company from July 2006 through July Mr. Ramirez served as Senior Director, Finance and Practice Controller of the Company from October 2005 to July 2006 when he was named Corporate Controller. Mr. Ramirez held a variety 6

10 of other positions within the Company s business intelligence, finance transformation and retail consulting practices from 1998 to Corporate Governance and Other Matters Board Composition The Board consists of six members, four of whom are considered independent directors under the listing standards of the NASDAQ Stock Market ( NASDAQ ). The Company s independent directors are Richard N. Hamlin, John R. Harris, Robert A. Rivero and Alan T.G. Wix. The Board currently has three standing committees the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Leadership Structure The roles of Chairman of the Board and Chief Executive Officer have been unified since the Company was founded, and the Board believes that the unification of those roles remains appropriate for the Company at this time. The Board believes that its leadership structure both (1) demonstrates to its employees, clients and shareholders that the Company is under strong leadership with a single person setting the tone and having primary responsibility for managing its operations, and (2) provides an effective connection between management s role of identifying, assessing and managing risks and the Board s role of risk oversight. The Board believes that Mr. Fernandez has an in-depth knowledge of the issues, opportunities and challenges that the Company faces, and therefore that he is best positioned to develop agendas and highlight issues that ensure that the Board s time and attention are focused on the most critical matters impacting the Company. The Board has not appointed a lead director. The Board believes that its structure, in which four of its six members are independent and each of its standing committees is chaired by and consists entirely of independent directors, provides effective independent director oversight of the Company s operations. The Board recognizes that different board leadership structures may be appropriate for companies in different situations, and understands that no structure is appropriate for all companies. While the Board intends to review the appropriate leadership structure for the Company from time to time, the Board believes that the Company has been, and is currently, well-served by its current leadership structure. The Board s Role in Risk Oversight The Board is responsible for overseeing the Company s management of the significant risks facing its business, including properly safeguarding the Company s assets, maintaining appropriate financial and other internal controls, complying with applicable laws and regulations, and implementing proper corporate governance practices. Risks are considered in virtually every business decision and in connection with the development of the Company s business strategy. The Board as a whole is responsible for reviewing and approving the Company s annual operating plan. In connection with that review, the Board typically inquires as to the greatest areas of risk associated with the annual operating plan and the Company s operating model taken as a whole, and evaluates whether these risks are appropriately mitigated. In addition, the Board s committees, which meet regularly and report back to the Board, play significant roles in carrying out the Board s risk oversight function. Company management also plays an important role in connection with risk management through the implementation of effective internal controls and other internal processes. The Board delegates to the Audit Committee responsibility for assisting the Board with several risk oversight functions, including oversight of: the quality and integrity of the Company s consolidated financial statements and its financial reporting and disclosure practices; 7

11 the Company s systems of internal controls regarding finance and accounting compliance; the independence and performance of the Company s independent registered public accounting firm; and the Company s ethical compliance programs. The Board delegates to the Compensation Committee responsibility for assisting the Board in the oversight of risks related to the Company s compensation programs. The Compensation Committee is charged with understanding the risks and rewards associated with the Company s compensation philosophy and ensuring that its various compensation the programs are aligned with the Company s goals and objectives. The Board delegates to the Nominating and Corporate Governance Committee authority to develop and implement the Company s director nomination guidelines and to recommend nominees for election, ensuring that the Board contains the appropriate mix of experience, qualifications, attributes and skills necessary to effectively exercise its oversight function. The Nominating and Corporate Governance Committee also is responsible for developing and implementing the Company s corporate governance guidelines. Audit Committee The Audit Committee reviews, acts on, and reports to the Board with respect to various auditing and accounting matters. The Audit Committee is directly responsible for the appointment, compensation, evaluation, retention and oversight of the Company s independent auditors. The primary functions of the Audit Committee are to assist the Board in its responsibility for oversight of: the quality and integrity of the Company s consolidated financial statements and its financial reporting and disclosure practices; the Company s system of internal controls regarding finance and accounting compliance; the independence and performance of the Company s independent registered public accounting firm; and the Company s ethical compliance programs The Audit Committee performs all functions required of audit committees of public companies under applicable laws, rules and regulations and the requirements of the NASDAQ Stock Market. The current members of the Audit Committee are Messrs. Hamlin (Chairman), Harris, Rivero and Wix. Rules adopted by the NASDAQ and the SEC impose strict independence requirements for members of audit committees. In addition to meeting the NASDAQ s tests for director independence, audit committee members must meet two further criteria set forth in the SEC s rules. First, an audit committee member is barred from accepting, directly or indirectly, any consulting, advisory or other compensatory fee from the issuer or an affiliate of the issuer, other than in the member s capacity as a member of the board of directors and any board committee. Second, an audit committee member may not be an affiliated person of the issuer or any subsidiary of the issuer apart from his or her capacity as a member of the board and any board committee. Each member of the Company s Audit Committee meets these independence requirements, in addition to the independence criteria established by the NASDAQ. The Board has determined that Mr. Hamlin and Mr. Rivero are audit committee financial experts, as that term is defined under SEC rules. The Audit Committee is governed by a written charter. A copy of the charter can be found on the Company s website at For further information on the Audit Committee, see the Report of the Audit Committee on page 12 in this proxy statement. 8

12 Compensation Committee The Compensation Committee is responsible for determining the compensation of the Company s executive officers and approving compensation and human resource programs for the Company. The Compensation Committee determines the compensation of the Company s CEO. In addition, the Compensation Committee has the following authority and responsibilities: to approve the compensation of all executive officers other than the CEO with input from the CEO; to review, approve and, when appropriate, recommend to the Board for approval, incentive compensation plans, equity-based plans, employment agreements and any severance arrangements or plans; to administer the Company s incentive compensation plans, equity-based plans and employee benefit plans; to review the Company s incentive compensation arrangements to determine whether they encourage excessive risk-taking, and to review and discuss at least annually the relationship between risk management policies and practices and compensation; to review director compensation for service on the Board and Board committees periodically and to recommend any changes to the Board; and to periodically retain an outside consultant to review the Company s compensation programs. The current members of the Compensation Committee are Messrs. Harris (Chairman), Hamlin, Rivero and Wix. The Board has determined that the current members of its Compensation Committee satisfy all of the independence requirements of the NASDAQ s listing standards. On an annual basis, the Company completes a review of the policies and practices associated with all of its compensation programs, including its executive compensation programs. As part of this assessment, the Company considers it generally beneficial from a risk management standpoint that awards are heavily weighted towards annual profitability. Annual profitability is, in turn, based on the delivery of services for which fees are collected in a relatively short period of time, providing the Company with visibility into its financial results before the pay out of incentive awards. For 2016, the Company conducted, and the Compensation Committee reviewed, a risk assessment of its compensation programs and considered the extent to which its compensation policies and practices influence the behaviors of its executives and other employees with respect to taking business risks that could affect the Company. The Company believes that none of its compensation policies and practices are reasonably likely to have a material adverse effect on the Company. The Compensation Committee is governed by a written charter. A copy of the charter can be found on the Company s website at For further information on the Compensation Committee, see the Compensation Committee Report on page 12 in this proxy statement. Nominating and Corporate Governance Committee The current members of the Nominating and Corporate Governance Committee are Messrs. Wix (Chairman), Hamlin, Harris and Rivero. The Nominating and Corporate Governance Committee is responsible for: identifying individuals qualified to become members of the Board; and recommending candidates for election or re-election to the Board. The Nominating and Corporate Governance Committee selects and must approve by at least a majority vote all candidates to stand for election as directors. Pursuant to the Company s bylaws, other candidates may also be 9

13 nominated by any shareholder, provided each such other nomination is submitted in accordance with the procedures set forth in the bylaws. For a discussion of the requirements for including information with respect to a shareholder s nominee in the Company s proxy statement, see Shareholder Proposals for the Annual Meeting in 2018 on page 53 of this proxy statement. The Nominating and Corporate Governance Committee is also responsible for the development and implementation of the Company s corporate governance guidelines. The Company s corporate governance guidelines can be found on the Company s website at The corporate governance guidelines implemented by the Nominating and Corporate Governance Committee contain criteria that the Committee employs to identify and recommend candidates to the Board. These criteria include: personal and professional integrity; the skills, business experience and industry knowledge useful in the oversight of the Company based on the perceived needs of the Company and the Board at any given time; the ability and willingness to devote the required amount of time to the Company s affairs, including preparation for and attendance at Board and committee meetings; interest, capacity and willingness, in conjunction with the members of the Board, to serve the long-term interests of the Company and its shareholders; and to the extent considered appropriate by the Board, whether a director candidate may be considered to be a financial expert as defined in relevant SEC rules These qualities would be considered as they relate to any candidate, whether suggested by management or by one or more of the Company s shareholders. The Company does not have a specific policy which addresses how diversity should be considered in connection with the identification of director nominees. The Committee and the Board have always taken an approach that neither favors nor disfavors any particular color, race, creed, gender or other component of a nominee s background such as skills and qualifications. The Board evaluates all candidates equally across all relevant factors and seeks members whose background, qualifications and skills will assist the Company in accomplishing its goals. The Company s corporate governance guidelines also contain stock ownership guidelines for the Company s CEO and the outside members of the Board. Pursuant to these guidelines, the Company s CEO is required to own a number of shares of the Company s common stock equal in value to six times his annual base salary. Mr. Fernandez s base salary for 2017 is $750,000. The Company s outside Board members are required to own a number of shares of the Company s common stock equal in value to three times their maximum annual cash compensation under the current Outside Director Compensation Program. For 2017, the maximum annual cash compensation is $40,000 for attendance at regularly scheduled Board and committee meetings. The Company s CEO and its outside Board members (other than Mr. Rivero, who was appointed to the Board on February 19, 2016) currently satisfy these requirements. Mr. Rivero will have until February 19, 2021 to meet the required level of stock ownership. The Company s CEO and its outside Board members are not required to purchase shares in the open market to satisfy these guidelines. Rather, they are expected to retain shares received upon vesting of restricted stock unit grants or upon the exercise of stock options until the guidelines are satisfied. Once the guidelines are achieved, neither the CEO nor any outside Board member will be considered to be out of compliance with these guidelines due to fluctuations in the Company s stock price. The Company s corporate governance guidelines also contain hedging restrictions that prohibit directors and officers of the Company from, directly or indirectly, engaging in hedging transactions with respect to securities of the Company. The Company s corporate governance guidelines also contain pledging restrictions that prohibit directors and officers of the Company from pledging securities of the Company as collateral for a loan or otherwise using securities of the Company to secure a debt (e.g., to secure a margin loan) without the prior written approval of the Audit Committee. 10

14 The Nominating and Corporate Governance Committee is governed by a written charter. A copy of the charter can be found on the Company s website at ir_governance.jsp. Other Matters During the fiscal year ended December 30, 2016, the Board, Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee each held 5 meetings. During that period, no director attended fewer than 75% of the total number of all meetings of the Board and any committee on which he served. The Company s independent directors regularly meet as a group in executive session outside of the presence of management. The Company s shareholders may communicate with its Board members via written correspondence mailed to the Company s corporate headquarters at 1001 Brickell Bay Drive, 30 th Floor, Miami, Florida As is the case with all regularly scheduled meetings of the Board and its committees, all of the Company s directors are expected to attend the annual meeting of shareholders in person. All of the Company s directors attended the 2016 Annual Meeting of Shareholders. The Company has adopted a Code of Conduct and Ethics that is applicable to all directors, officers and employees of the Company and complies with the requirements of Section 406(c) of the Sarbanes-Oxley Act. The Code of Conduct and Ethics reflects the Company s policy of dealing with all persons, including its customers, employees, investors, regulators and vendors, with honesty and integrity. A copy of the Company s Code of Conduct and Ethics can be found on the Company s website at ir_governance.jsp. The Company intends to post amendments to or waivers from the Code of Conduct and Ethics that are applicable to the Company s CEO, CFO or Controller on its website in accordance with SEC rules. 11

15 COMPENSATION COMMITTEE REPORT The Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis below. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in the Company s Annual Report on Form 10-K for its fiscal year ended December 30, 2016, and the Board has approved that recommendation. Respectfully submitted, Compensation Committee John R. Harris, Chairman Richard N. Hamlin Robert A. Rivero Alan T.G. Wix 12

16 COMPENSATION DISCUSSION AND ANALYSIS Overview of Compensation Philosophy and Objectives The Committee s objectives relating to compensation are to align the financial interests of its executives with those of its shareholders and to attract and retain highly qualified executives. The Company achieves these objectives by linking a substantial portion of each executive s compensation to the achievement of financial and operational objectives in the executive s particular business unit or the Company as a whole. The Compensation Committee has adopted a pay-for-performance compensation program for the Company s executive officers that rewards the achievement of both annual and long-term business objectives based on the improvement of operating performance and earnings growth as well as share price appreciation. The Company s executive officers are encouraged to focus on the future growth and current profitability of the Company. The Company believes that this will lead to increased shareholder value. The main goals of the Company s executive compensation programs are as follows: to focus executives on critical business issues; to ensure that the executive team has clear goals and accountability with respect to the Company s financial performance; to attract and retain executive talent; to increase shareholder value; and to provide significant incentive opportunities tied to the attainment of specific financial performance goals In order to attract, retain, and commit top executives to the fulfillment of superior performance results, the executive compensation programs are designed to provide superior pay opportunities in exchange for superior performance. The Company believes that its compensation program supports its business strategies and directly links pay with performance results. The Company continues to observe what it believes to be its directly comparative pay market, which is other strategic consulting and business advisory organizations and professional services firms which are mostly of significantly greater size. In order to assure that executive compensation is both competitive and appropriate, the Compensation Committee reviews executive compensation in its entirety before determining any adjustments to specific compensation components. In this process, the Compensation Committee primarily considers the value of cash and incentive stock compensation. These compensation components are even more meaningful since the Company does not provide any retirement benefits in any form including defined benefit, defined contribution or supplemental retirement plans for its executives. The Compensation Committee also periodically reviews external market data on executive compensation in order to obtain a general understanding of current compensation practices. Prior to review and adjustment of executive management compensation for 2017, the Committee retained John Bloedorn, an independent compensation consultant formerly with Mercer who was involved with the development of the Company s current executive compensation programs to gather relevant marketplace data on total compensation for similar executive positions. This data consisted of annual salary, short-term incentives, long-term incentives, and pay mix. Data was obtained from total compensation information of similarly sized publicly traded companies including a subset of the Company s historical peer group and the most recent Institutional Shareholder Services peer group. In addition to Mr. Bloedorn s analysis, the Board also considered the Company s direct competitor group which are primarily private and much larger consulting groups such as McKinsey, Bain, BCG and the consulting arms of PwC, Deloitte, E&Y and KPMG. 13